As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the maintenance and repair distributors industry, including W.W. Grainger (NYSE:GWW) and its peers.
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Maintenance and repair distributors that boast reliable selection and quickly deliver products to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to serve customers everywhere. Additionally, maintenance and repair distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.
The 8 maintenance and repair distributors stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, maintenance and repair distributors stocks have held steady amidst all this with share prices up 1.3% on average since the latest earnings results.
W.W. Grainger (NYSE:GWW) Founded as a supplier of motors, W.W. Grainger (NYSE:GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.
W.W. Grainger reported revenues of $4.31 billion, up 3.1% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with full-year revenue guidance slightly topping analysts’ expectations but a miss of analysts’ organic revenue estimates.
"I'm proud of our team for providing a flawless experience and creating tangible value for our customers. Amidst the backdrop of a slow, but generally stable demand environment, we focused on what matters and produced another quarter of solid results," said D.G. Macpherson, Chairman and CEO.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $968.04.
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Best Q2: DXP (NASDAQ:DXPE) Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
DXP reported revenues of $445.6 million, up 4.1% year on year, outperforming analysts’ expectations by 2.7%. It was a stunning quarter for the company with an impressive beat of analysts’ earnings estimates.
DXP pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.6% since reporting. It currently trades at $54.75.
Weakest Q2: WESCO (NYSE:WCC) Based in Pittsburgh, WESCO (NYSE:WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.
WESCO reported revenues of $5.48 billion, down 4.6% year on year, falling short of analysts’ expectations by 1.5%. It was a weak quarter for the company with a miss of analysts’ earnings estimates.
As expected, the stock is down 6.9% since the results and currently trades at $162.83.
MSC Industrial (NYSE:MSM) Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE:MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors
MSC Industrial reported revenues of $979.4 million, down 7.1% year on year, in line with analysts’ expectations. Zooming out, it was a mixed quarter for the company with a narrow beat of analysts’ revenue estimates.
MSC Industrial had the slowest revenue growth among its peers. The stock is up 4.4% since reporting and currently trades at $81.63.
Fastenal (NASDAQ:FAST) Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Fastenal reported revenues of $1.92 billion, up 1.8% year on year, in line with analysts’ expectations. Taking a step back, it was an ok quarter for the company with revenue and EPS roughly in line with analysts’ earnings estimates.
The stock is up 5.2% since reporting and currently trades at $67.51.
This content was originally published on Stock Story
